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Industrial Analysis and Technology Planning

The document outlines the importance of industrial analysis and technology planning for businesses, emphasizing the need to understand competitive forces and industry dynamics to identify opportunities and threats. It highlights key elements of industry analysis, including competition, supplier and buyer power, and the threat of new entrants and substitutes. Additionally, it details a structured technology planning process that involves assessing resources, defining needs, exploring solutions, and implementing a strategic plan to enhance productivity and align with business goals.

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viveshshrestha27
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24 views10 pages

Industrial Analysis and Technology Planning

The document outlines the importance of industrial analysis and technology planning for businesses, emphasizing the need to understand competitive forces and industry dynamics to identify opportunities and threats. It highlights key elements of industry analysis, including competition, supplier and buyer power, and the threat of new entrants and substitutes. Additionally, it details a structured technology planning process that involves assessing resources, defining needs, exploring solutions, and implementing a strategic plan to enhance productivity and align with business goals.

Uploaded by

viveshshrestha27
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Industrial analysis and

technology planning
Industrial analysis

 The industry is a collection of Competitors producing a similar product or offering


similar services to their customers.
 Industry analysis in a business plan is a tool which enables a company to
understand its position relative to other companies that produce similar products
or services like it.
 While taking into account the strategic planning process, a company has to
specifically understand the forces at work in the overall industry.
 Thus the processes of Industry analysis in a business plan enables businesses to
identify the threats and opportunities facing them.
 It helps them to focus their resources on developing unique capabilities which can
help them to gain a competitive advantage.
Major elements of Industry analysis

1. Understanding the underlying forces at work


• Competition intensifying
• Changing customers’ needs and taste
• Technological innovation
• Globalization
• Entry of major competitors
• Sudden regulation or deregulation
2. Understanding the attractiveness of the industry
• Whether it is feasible to enter or invest in that industry.
3. Understanding the critical industry analysis factors that determine success within the industry.
• It is an important element of any investment that one wants to make.
• In order to succeed in a specific industry, it is important for the business owners to analyze that
industry.
• Important for positioning the company in the niche market
• Aids the companies to identify the potential opportunities.
• Helps in analyzing the threats
• Helps to analyze the fit between internal management preferences and the business environment.
• Helps in mitigating the risk of entering an extremely competitive business.
Ways to perform Industry Analysis

 One way to perform the industry analysis in a business plan is to do the ratio
analysis and comparisons. Ratios are calculated by dividing one business variable
by another. By comparing the company ratio with that of the industry, a business
owner can understand where his business stands in relation to the industry
average.
 Another important model for analyzing the industry was developed by Michael E.
Porter, in his classic book Competitive Strategy: Techniques for Analyzing
Industries and Competitors (1980). His model shows that rivalry among the firms
in industry depends upon the following five forces:
 The threat of New Entry
 The threat of new entrants refers to the threat that the new competitors pose to
existing market players in the industry. Naturally, a profitable industry will attract
more competitors who are looking to achieve profits. If the entry barriers in the
industry are low, it may pose a great threat to the firms who are already
competing in that market.
 Bargaining power of the Supplier
 Supplier power refers to the pressure that the suppliers can exert on businesses by raising prices or lowering
quality or reducing product availability. Strong suppliers can pressurize the buyers by raising product prices or
lowering product quality or reducing product availability. All of these things directly costs to the buyer.
 Bargaining power of the Buyer
 It refers to the pressure that the buyers can exert on businesses to provide them with higher quality
products, better customer service, and at lower prices. Strong buyers can make the industry more competitive,
thus decreasing the profit for the seller.
 Competitive Rivalry
 It is the extent to which the competitive firms within an industry can pressurize each other’s, thus decreasing the
profits. Fierce competition may lead to stealing of profits and market share within the competitors
 Threat of Substitution
 It is the availability of a substitute product which the buyers can find instead of a core selling product.
Technology Planning

 The technology plan provides businesses with a clear, tangible plan to


achieve its goals. The plan provides businesses with a plan of action of
technology and communications that aligns with the overall goals to improve
productivity, production, the customer experience, and software development.
 Technology planning is a process that takes time and resources in order to
understand what is appropriate for staff and the organization.
Technology Planning process

 Establish leadership and support


Setting up a technology team and ensuring management and staff buy-in will allow you to get
started with the whole organization behind you. A tech plan isn't written in a day. The process
behind the writing is the most important part, and the process is all about how staff work together
to find the best solutions.

 Assess your resources


The first step in planning is to assess your existing technology. What do you have in place? How
well is it working?
 Define your needs
Why do you need technology? What will new technology help you do that you can't do already?
Defining your needs will enable you to choose the most efficient solutions.
 Explore solutions
The next step is to research existing technology options and decide on ones that meet your needs
at a minimum cost.
 Write the plan
Your written plan should document your resources, needs, and solutions, as well as your budget.
 Get funding
You can now use your technology plan as a key element in seeking technology funding
 Implement the plan
Setting a timeline, assigning responsibilities, and evaluating your progress will make your plan a
reality

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